Question

Diamond Company manufactures two models of cassette recorders: VCH and MTV. Based on the following production data for April, prepare a production budget.

VCH MTV
Estimated inventory (units), April 1 2,900 4,000
Desired inventory (units), April 30 6,900 5,250
Expected sales volume (units):
Eastern zone 12,500 12,960
Midwest zone 19,000 19,800
Western zone 14,500 9,840

Answer 1

Answer and Explanation:

The preparation of the production budget is presented below:

Particulars VCH MTV

Expected Sales:

Eastern zone 12500 12960

Midwest zone 19000 19800

Western zone 14500 9840

Add: Desired inventory 6900 5250

Less: Opening inventory (2900) (4000)

Production in units 50,000 43,850